Budget First, Think Later

Ah, budgets! Nothing like ’em to let everyone know where an organization’s priorities lie. Platitudes and good wishes lead to warm, fuzzy feelings. But once the money is put where the proverbial mouth is, all ambiguity vanishes.

Or does it?

In a perfectly rational world, where everyone’s actions are reasoned and based on objective facts (or as close as we can get to objective facts), setting budgets would be a reasoned practice devoid of emotion, politics, and conjecture. We’d examine performance, align with organizational goals, assign value, and go. That’s how all of us operate.

Yeah, right.

Unfortunately, most companies I come across use techniques that have more to do with horse-trading and voodoo than basic economics. This is especially true with marketing budgets, even more so in the interactive world.

How many times has a client come to you with a preset budget for online marketing or Web development? “We’ve got $50K to spend online,” says the well-intentioned client, “What should we do with it?”

In many cases (lately, ever more frequently) our response is to say “thank you,” take the number, scramble about, and come up with a solution that fits the budget. Logical, right?

Wrong. Dead wrong.

Forget about the thank-you. What you should ask is, “What are you trying to accomplish?” Get the answer and put on your thinking cap.

It’s not that they don’t mean well. They do. But the silos that have developed since the Web became a force in business have done a lot to hurt marketing. Because many companies still view the Web as something new, they respond by allocating funds based on an approach that says, “Here’s what we can gamble.” Granted, this doesn’t happen in all cases (big brands seem savvier than the smaller companies I’d bet most of us make our living serving). But it still happens a lot. Contrary to what we like to think, the dream of integration is still unrealized in most organizations.

Two recent experiences drove this point home. The first struck me when I was interviewing a candidate from a major international agency for a media director position. We got on the subject of interactive, and she chuckled. I asked why.

“I love interactive!” she said with a grin. “It used to be that media was the last to present in a meeting. Now, it’s the interactive guys who usually get the last few minutes.”

Too true.

Several days later, I was at a launch party for a very large university site my firm built. While basking in the afterglow of a fantastic project, I seized the opportunity to ask our client what she thought about the site.

“I love it!” she smiled, “It amazes me we spent about 75 percent of what a viewbook would have cost!”

(For those of you who don’t interact with higher ed, a viewbook is the super-glossy, high-production-value brochure colleges put out to lure new students to the school.)

Her statement floored me. They spent a very significant amount of money on a site that not only will serve as the primary marketing/communications vehicle for the school but also is a campuswide calendar, gallery, fundraising tool, and alumni communications vehicle. Still, they spent less than they would have on a four-color brochure that would have to be redesigned and printed next year and that would end up in more trash cans than on freshmen’s bookshelves.

Therein lies the crux of the budget issue. “Traditional” advertising vehicles — print, TV, and radio — have history. They have precedent. They keep getting done because they’ve always been done that way. Budgets can easily be set for these forms of communication because they’re predictable and more or less immeasurable (compared to interactive). They’re safe and conservative and won’t scare the higher-ups who climbed the ladder before the explosion of digital media. We in the biz like to talk of integration. Budgets support separate and very unequal worlds.

The media sphere is expanding for consumers. Wireless (such as it is), personal video recorders (PVRs), games, and other new New Media offer new choices. Conservatism and inertia are doomed to failure. Though choices proliferate, there’s one constant: time. Many media withstood predictions of imminent demise. Cannibalization does occur, and consumers are increasingly fragmented. True reach means expanding beyond the way things have always been done.

It’s important we don’t repeat the mistakes of past years and allow the pendulum to swing too far in the other direction. It’s foolish in the extreme and means committing the very same errors the tech sticks-in-the-mud did: making choices based on what something is rather than what it does. Spending online just because it’s cool or new or part of your department is just as stupid as not spending online at all.

In returning to that client with the preset online budget and asking, “What are you trying to accomplish?” we’re doing the best thing we can. Force everyone to think. Who do you want to reach? What media do they consume? What do you want them to do? And the toughest question, what medium does the job best?

These questions cut to the quick. They question “budget first, think later” attitudes. They’d reduce silos to rubble if they were answered honestly. They force us to think about experience, about measurement, and about strategy in its purest sense.

Expertise from all disciplines is required to truly understand the implications of the questions and find answers. Desired results are based on reason, not org charts.